Where are the safe havens?

My latest post at Credit Writedowns Pro on protecting wealth in a world of recurring crisis is now up. I outlined eight principal investing risks that I see for for 2012 and strategies to avoid those risks. At the same time, the thought you should have in the back of your head is that these are just the known unknowns. But that there are unknown unknowns which create so-called Knightean Uncertainty and make this a dangerous investing climate.

In the US, people are turning to dodgy asset-backed schemes to get a little yield pickup as the Fed has trashed cash with zero rates. These are the risks investors are willing to make. In the future, I anticipate that it won’t just be zero rates; government will find more coercive measures to prevent the system from collapsing. The question then is not just how an American investor could avoid downside risk in the US but where can one go outside of the US to get a decent, safe return.

Where are the safe havens?

I have some specific ideas on this and will be using the weekly newsletter to highlight them. but I thought this Capital Account interview with Gonzalo Lira was a good one on this issue and recommend you watch it.

P.S. – My view: Switzerland is definitely not a safe haven for American investors anymore.

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.

Ultimately if you are a US citizen your only option is to relocate, and then renounce your US citizernship. Otherwise you are still liable for US taxes even as an expat. Though what are the safe havens? Canned goods and ammo would be high up the list. While Australia was mentioned there has been a substantial property bubble there which looks like bursting soon and that bakes in guaranteed losses if you are not careful. Farmland elsewhere could also be a bubble, unless you bought some years ago.

US permanent residents must also file taxes based on worldwide income regardless of where they are resident, the rationale being their permanent residency means they will eventually return to the US. No other developed country has this policy to my knowledge.